On our own behalf – The Beer Monopoly on the Forbes List „Best Booze Books of 2017“
We are speechless. Surprised. Humbled. Incredibly grateful. Our book The Beer Monopoly appears on this year`s Forbes List "Best Booze Books". No, no, it`s not the Forbes Rich List. Fat chance of us ever getting on to that one. The list was compiled by Tara Nurin and can be found here >>
Posted February 2018
South Africa – Heineken buys craft brewer Jack Black
Heineken is beating AB-InBev at their game, at least in South Africa. In early February 2018 the Dutch brewer bought a minority stake in craft brewer Jack Black from Cape Town. No financial details are known. According to estimates, Black Jack sold about 20,000 hl beer last year.
This is Heineken’s third investment in South African craft brewers in less than 12 months. In March 2017 Heineken bought Stellenbrau, a craft brewer located in the Stellenbosch wine region north of Cape Town. Read on
Germany – The fate of AB-InBev’s former breweries Hasseröder and Diebels
Is it possible that AB-InBev’s job lot sale of the two breweries could be untied again? Insiders think that their new owner, the former banker and consultant Daniel Deistler, who acquired them from AB-InBev in January 2018 for an unknown sum (estimates range from EUR 150 million to EUR 200 million), might exactly do this.
Although Mr Deistler took on Hasseröder and Diebels’ management, he has since hired a former manager from the auto-supply industry to serve as managing director. Like Mr Deistler himself, the new MD Thomas Buchholz, 60, has no brewing industry background. This has led German insiders to speculate that the buyer has plans for the two breweries that AB-InBev could not or would not implement. Read on
USA – Stone brewery sues MillerCoors’ Keystone over trademark infringement
Greg Koch is not a happy man these days. He has to sue the number two brewer in the US, MillerCoors, because it has shortened the name of its beer brand “Keystone” to “Stone” in its recent 2017 rebrand.
Mr Koch argues this is a deliberate move to cause confusion with Stone’s name in the market.
As is custom these days, if you want to get the word out, you post a video on YouTube. Which Mr Koch did on 12 February 2018. Within four days, over 100,000 people had watched the video. Read on
China – AB-InBev bets on high-end brands and opens a craft brewery
AB-InBev’s venture capital division ZX Ventures will open a craft brewery in Wuhan, central China, in order to tap into the growing market for premium beers in the country, media reported in early February 2018.
The fact that AB-InBev is placing its bets on an expanding high-end beer segment is not surprising. While China’s beer market has contracted massively over the past few years to the detriment of mainstream brands, the high-end segment grew its market share to slightly over 3 percent in 2016, according to Kantar, a market research firm. Read on
Mexico – Constellation Brands to invest up to USD 600 million in capacity increases
In the years since 2013, when Constellation Brands added the Mexican brands Corona, Modelo Especial, Victoria and Pacífico to its portfolio, its beer market share in the US has tripled. Now the company plans to invest up to USD 600 million at its Mexican breweries during 2018 to keep its growth.
Five years ago, Constellation Brands’ market share was 4 percent. In 2017 it was 12 percent, making it the only major US brewer which has enjoyed sizeable sales hikes. The company is optimistic that it can achieve an annual growth rate of 1 percent for the foreseeable future, media say. Read on
Australia – Gripes over state funding for BrewDog
… and rightly so. Apparently, Brisbane’s small brewers are more than a little disgruntled that the Queensland government is trumpeting its financial support for Scottish craft brewer BrewDog, which will build a brewery cum restaurant in that city and create over 200 jobs.
As writes Matt Kirkegaard, a local industry observer, “[local craft brewers] are unconcerned about the competition, which they see as positive, but they are astounded at the complete lack of investment or interest in local businesses [like themselves] … to whom government ministers love to pay lip service.”
BrewDog’s total investment is to run to AUD 30 million. How much the Queensland government is contributing is unclear. While the government is boasting of its success at bringing BrewDog to the state, apparently only AUD 10 million are going towards the construction of the brewery, which will be built and owned by a local developer and then leased to BrewDog. Read on
Netherlands – Heineken warns of lower profit growth in 2018
Have the good times come to an end? Volatile markets and an acquisition in Brazil prompted the world’s number two brewer Heineken to forecast that its profitability in 2018 would improve by less than the target it had set for the previous three years.
The Dutch brewer had a target of increasing its operating margin by 40 basis points (or 0.4 percent) per year between 2014 and 2017 but said it expected this margin to increase by 25 basis points in 2018. Read on
Denmark – Carlsberg writes down Baltika by USD 800 million
Danish brewer Carlsberg reported 2017 profit well below analysts’ expectations, hit by a fall in sales and a large write-down in its key Russian market.
Carlsberg, the world’s number three brewer, said on 7 February 2018 that beer volumes were 112 million hl in 2017, down from 117 million hl in 2016. Worst hit was Russia, where volumes declined 14 percent and its market share fell to 31.9 percent from 34.6 percent. Read on
Germany – Warsteiner Brewery to axe 240 jobs
Drastic turnaround measures have been on the cards since in 2017 Warsteiner Brewery freed most of its executives and hired management consultancy Roland Berger to come up with a “programme for the future”. However, the euphemistically called “programme” is above all a cost cutting exercise with a few disposals rolled into it.
The programme, announced on 1 February 2018, will cut deeply into Warsteiner’s workforce: about 240 jobs (out of currently 1,500) will be axed. Besides, Warsteiner is looking for a buyer to take on its distribution unit and the Herforder Brewery which it bought in 2007.
In the 1990s Warsteiner was on the rise, selling about 6 million hl of its eponymous pils brand. This turned it into Germany’s most popular beer brand with a domestic market share of around 6 percent. But when the Cramer family, its owner, expanded the brewery on a projected sales hike to 10 million hl, its fortunes changed and sales decreased. There was seemingly no end to the sales decline. By 2017 sales had dropped to 2.1 million hl, according to estimates by Inside, a German trade publication. Amongst Germany’s national beer brands Warsteiner ranked 7th in 2017. Read on
Australia – BrewDog to open AUD 30 million brewery in Brisbane
BrewDog’s money supply seems to be nearly endless. After building a brewery in Columbus, Ohio (USA) last year, BrewDog will open an AUD 30 million (USD 23 million) brewery and restaurant in Brisbane. That’s cheeky because Brisbane is home to the XXXX brewery, which produces the country’s major beer brand XXXX and is owned by the Big Brewer, Lion.
Last year, BrewDog announced it was coming to Australia and was eyeing two east coast cities – Newcastle and Brisbane. In the end Brisbane was successful in luring BrewDog, following a state government and Brisbane Marketing pitch. But the government would not reveal what financial incentives were offered.
BrewDog’s Australian site will include a 50 hl brewhouse and canning facility.
It seeks to employ more than 150 people in the next five years, with 235 jobs created over the next 10 years. There are already about 20 breweries in Brisbane, including the XXXX brewery. Read on
Germany – Weihenstephan collaborates with Sierra Nevada
It may be the world’s oldest brewery and owned by the Bavarian state government, but this does not mean that its people are retrogressive codgers. Weihenstephan Brewery, located outside Munich since monks began brewing there in 1040, has a new hefeweissbier. It’s a collaboration between the state-owned brewer and California’s major craft brewer Sierra Nevada. Read on
Australia – Craft beer poll shows: independence matters
Now in its 10th year, the GABS Hottest 100 Aussie Craft Beer poll indicates the trends, brands and breweries shaping the craft beer industry. Described as “the largest and most influential people’s choice poll in the land,” this year’s poll attracted tens of thousands of craft beer lovers to vote for their five favourite craft beers.
In a year marked by the acquisitions of some craft leaders – 4 Pines (NSW) and Pirate Life (SA) by AB-InBev and Feral Brewing (WA) by Coca-Cola Amatil – the results of the poll show that ownership is important to craft beer consumers, with beers from each of the above-mentioned breweries slipping in rankings from the previous year. Read on
Turkey – Illicit brewing hits Efes’ sales
The rising trend among Turks brewing on the sly has hit the sales of a range of drinks in the country, including beer. Anadolu Efes Group, which owns Turkey’s top beer brand, Anadolu Efes, recently reported that in 2017 its domestic sales slumped 3.2 percent year-on-year.
“Beer sales in Turkey have been decreasing but I’m not sure about a drop in consumption,” Anadolu’s Group Chairman Tuncay Özilhan said at an event in Frankfurt on 1 February 2018. “I believe the reason behind the decrease in beer sales is the surge in homebrewed beer in Turkey. Many people brew their beer at home using special equipment, which is sold at relatively cheap prices,” he was quoted as saying. Read on
Russia – Football could give a boost to swooning beer sales
Data provided by Morgan Stanley shows that the upcoming 2018 FIFA World Cup in Russia this summer could lift beer consumption. It estimates football fans’ impact on beer consumption at 2 percent. As a result, it expects that Russia’s beer market would grow during 2018, for the first time in a decade. Recently Anadolu Efes reported that beer consumption dropped in the low single digits in 2017.
The Russian Brewers’ Union confirmed that beer sales in Russia could indeed grow in 2018. Read on
Russia – Alcohol consumption in Russia has fallen: but is it 80%?
Allegedly, Russians are consuming 80 percent less alcohol than five years ago. This figure was put out by the Minister of Health, Veronika Skvortsova, recently. The BBC did a reality check and published its own findings on 27 January 2018.
The verdict: alcohol consumption has dropped … but not by 80 percent. As says the BBC, there are two sets of statistics – one collected by the Russian statistics agency, Rosstat, and one by the World Health Organization (WHO). Read on
Mexico – Bacardi buys Patron tequila
Tequila remains in demand. Bacardi has agreed to buy out Patron Spirits International in a deal valuing the high-end tequila maker at USD 5.1 billion. Bacardi, the world’s largest private spirits business, already owns 30 percent of Patron, which it purchased in 2008 from businessman founder John Paul DeJoria, 73, who is equally famous for co-founding the shampoo company John Paul Mitchell Systems.
The deal was announced on 22 January 2018 and came days after Pernod Ricard bought out Avion Tequila and months after Diageo bought George Clooney’s Casamigos tequila for up to USD 1 billion. Read on
USA – Charlie Papazian to retire from the Brewers Association
What – Charlie is THAT old? Good grief, the man will turn 70 next year. As they say, time flies if you are having fun. Still, some good things must come to an end and so the Brewers Association (BA) announced recently that founder and past president Charlie Papazian will retire from the Brewers Association on 23 January 2019, marking his 70th birthday and 40 years building the craft brewing community and inspiring brewers and beer lovers around the world. Read on
USA – More caffeine, please: coffee firm Keurig buys Dr Pepper Snapple
Don’t you sometimes marvel at the stories that are sold to the public to explain a deal’s rationale? The US soft drink maker Dr Pepper Snapple is to merge with coffee company Keurig Green Mountain to form Keurig Dr Pepper. The transaction was announced on 29 January 2018.
Keurig Green Mountain will pay USD 18.7 billion in cash for Dr Pepper Snapple. Observers say Keurig and its majority owner, JAB, are betting that they can create a beverage giant with an estimated USD 11 billion in revenue, and brands such as Keurig’s single-serve coffee pods, Dr Pepper, 7Up and Snapple.
What do the two have in common? Well, both market caffeine beverages amongst others. This does not sound like a convincing rationale, does it? In effect, the transaction is more about creating a large distribution network in the US than anything else. Read on
UK – Gin and tequila hike Diageo’s profits
Global drinks company Diageo recently announced that its operating profit rose by over 6 percent to GBP 2.2 billion (USD 2.97 billion) in the six months to 31 December 2017. Net sales were GBP 6.5 billion (USD 8.77 billion), an increase of 1.7 percent, with all regions contributing to the company's sales growth.
Beer accounted for roughly 15 percent of Diageo’s net sales in the half and is the second largest category for Diageo after scotch. Read on
Dominica – Future of storm-wrecked brewery uncertain
The small Caribbean island of Dominica was Hurricane Maria’s first victim. After it had blown over in September 2017, the island was tatters, including its brewery.
Although things are slowly improving after the devastation – leaves are coming on the trees, the grass is growing, the parrots are returning according to local media’s flowery language – no one seems to know if the brewery will be rebuilt.
With a population of 73,000 people, the island’s economy is largely dependent on agriculture. Because Dominica is volcanic and has few beaches, development of tourism has been slow compared with neighbouring islands. In recent years it has expanded its financial services, but this sector is not a huge job creation machine. To stem the flow of emigrants, in the 1990s the then government supported the construction of a brewery which eventually employed over 50 people directly.
The brewery, called Dominica Brewery & Beverages Limited (DDBL), was built in 1995. It brewed a popular beer brand Kubuli and bottled a mineral water brand Loubiere. It also produced Guinness und VitaMalt under licence. At its peak it rolled out 21,000 hl beer and 20,000 hl mineral water per annum.
Its destiny has been decided elsewhere, at least since 2006 when Danish brewer Royal Unibrew bought it together with the Antigua and St Vincent breweries. Obviously, these small island breweries are at a disadvantage when it comes to their cost structures. In terms of efficiency and profitability they cannot compete with larger plants.
This would have dawned upon Unibrew’s controllers in due course and in 2009 the Danish sold their controlling stake in the breweries to the dominant Caribbean brewer CND from the Dominican Republic, famous for brands such as Presidente, Bohemia Especial and Ambar.
Reportedly, the transaction value was USD 30 million. However, CND could not improve Antigua Brewery’s profits either and the brewery ceased production in 2011. Only the breweries on St Vincent and Dominica managed to pass muster somehow.
Since then CND itself has changed hands too. In 2012, AB-InBev’s Brazilian unit AmBev agreed to buy a controlling stake in CND. The deal included a USD 1 billion payment to Grupo Leon Jimenes, one of the largest companies in the Dominican Republic, and an additional USD 200 million to Heineken for its minority stake in the CND, giving AmBev majority ownership. At the same time AmBev combined its Dominican operation, known as Ambev Dominicana, with CND’s.
Finally, in December 2017, AmBev announced it would increase its stake in CND to 85 percent, paying about USD 930 million to its partner for 30 percent. The deal will be completed in early 2018.
Most likely, the Dominica Brewery would have faced closure like Antigua had not hurricane Maria wrecked it beforehand.
USA – Pabst eliminates one in five jobs
It’s probably called flexibility. For the second time in as many years, Pabst Brewing Company has undergone a major restructuring, announcing on 18 January 2018 that it has eliminated a total of 70 positions or 18 percent of its workforce.
The cuts will affect all areas of the business and help the company reduce its cost base by 15 percent. To this effect, 50 employees have been let go and another 20 open positions will not be filled. Read on
Israel – AB-InBev buys beverage analytics start-up WeissBeerger
AB-InBev is thirsty for your dollar and data. The world’s number one brewer has acquired the Israeli beverage analytics start-up WeissBeerger, media reported on 26 January 2018. No financial details were disclosed but it is believed the brewer will pay about USD 80 million for the firm. WeissBeerger, which was founded in 2011, has managed to raise some USD 15 million to date according to Crunchbase. Investors include Google’s former CEO Eric Schmidt. Read on
Germany – Carlsberg builds brewpub on Reeperbahn as workers go on strike
The dispute over relocating the Holsten Brewery from central Hamburg to the outskirts in 2019 is turning into a brawl between Carlsberg and the union NGG. On 31 January 2018 NGG called for another 24-hour strike, after the previous strike in December 2017 had failed to force management back to the negotiating table.
The Carlsberg Group is planning to axe 70 out of 450 jobs in connection with the relocation. The new brewery will be much smaller than the old one. NGG complains that the employees affected by redundancy still have not been offered a fair severance scheme. NGG is calling on Carlsberg’s management to present a “real plan for the future” for its employees in order to turn the move into a success. Quite a number of employees worry that Holsten could face more than just a few teething problems once it shifts production to the new site.
Meanwhile, Carlsberg is putting the finishing touches to its Astra brewpub on Reeperbahn. In case readers wonder if it isn’t it a bit naughty to build a brewpub for the beer brand Astra on Hamburg’s Reeperbahn, the city’s legendary nightlife drag (930 metres) and red-light district – no it isn’t. The Astra brand, which enjoys a bit of a cult status in northern Germany, used to be brewed around the corner at the former Bavaria-St. Pauli Brewery, which was shut in 2003 and torn down. Astra has since been brewed at the Holsten Brewery in neighbouring Altona. Carlsberg acquired Holsten in 2004. Read on
USA – Constellation Brands disappointed by its craft breweries
The distributor of Corona in the US had the best performance of any brewer in 2017, media say. While craft beer sales have slowed and the overall beer industry remains stagnant, if not in decline, Constellation Brands has continued to grow its business regardless.
Although beer represents nearly 60 percent of its total revenue and 80 percent of its operating profit (wine and spirits contribute the rest), this was the first time in the past ten quarters that Constellation Brands did not beat Wall Street’s expectations when it reported third quarter 2018 results on 5 January 2018.
Part of the explanation is that Constellation paid too much for the craft breweries Ballast Point and Funky Buddha. Consider this: Constellation Brands did not even talk about its craft-beer acquisitions in its most recent investor call. Read on
UK – Elvis Presley’s estate loses trademark battle with BrewDog
Elvis Presley’s estate has lost a trademark dispute with Scottish craft brewer BrewDog over the brewer’s use of the name “Elvis” for one of its products. The case hit the courts in October 2016. BrewDog celebrated the ruling on 29 January 2018.
BrewDog launched the drink, a grapefruit-flavoured IPA, in 2015. But in 2016 Authentic Brands Group (ABG), which manages Elvis Presley's name and official events, wrote to founders James Watt and Martin Dickie instructing them not to use it.
In October 2016 the pair responded by changing their first names to “Elvis” by deed poll, in the hope that doing so would demonstrate the lack of exclusivity of the name Elvis. The cofounders of BrewDog – formerly James Watt and Martin Dickie – henceforth shall be known as Elvis Watt and Elvis Dickie. Read on